Facebook shareholders vent ire over sagging stock

The IPO on 18 May last year sparked a series of crises for Facebook, with the shares plunging from $38 to as low as $17.73 in September. Photo: Ramesh Pathania/Mint

San Francisco: Facebook Inc. shareholders on Tuesday grilled leaders of the social network regarding how they planned to revive the company’s stock and protect user privacy from snoops including US spy agencies.

Facebook’s famed co-founder Mark Zuckerberg and chief operating officer Sheryl Sandberg fielded a barrage of questions fired by investors who attended the first annual meeting of shareholders since the stock market debut last year.

“We understand that a lot of people are disappointed in the performance of the stock, and we are too,” Zuckerberg said before the start of a question-and-answer session that followed election of the Facebook board.

“It is our job here to build a great company,” he continued. “We think that, over time, we are building an asset and a network continually valuable in the world and we will continue to do that.”

Zuckerberg, who was elected to the board along with Sandberg and six others, urged stockholders to be patient but declined to predict how long it would take to build up shares that sank in a dismal initial public offering on the Nasdaq.

The IPO on 18 May last year sparked a series of crises for Facebook, with the shares plunging from $38 to as low as $17.73 in September.

Shares closed slightly down Thursday at $24.03.

“What the hell is your forecast for revenue and income for the next year?” one shareholder asked gruffly.

Chief financial officer David Ebersman told the investor that Facebook hasn’t made earnings forecasts the way other publicly traded companies typically do because it is young and in “a difficult business to predict right now.”

“My family is a big fan of yours, and because of that I invested blindly,” another stockholder told Zuckerberg and his team. “And now I am under water.”

A woman who said she bought more than 8,000 shares of Facebook at its debut asked the executives whether the stock was a smart buy at $24 a share only to be told the company wouldn’t give individual investment advice.

Another shareholder referred to the IPO as a disaster.

“Our strategy is to build great mobile apps, get more people to be able to connect through them, and build a network people can use and monetize that by building a strong advertising engine,” Zuckerberg said.

“Unfortunately, we don’t have control over the share price, particularly in the short term.”